Topic 451: Doc Searls - The Intention Economy

We are extremely fortunate to have Doc Searls with us to discuss his
new book The Intention Economy: When Customers Take Over. Our own Jon
Lebkowsky will be leading what should prove to be a far-ranging
discussion.
Doc is an author and journalist, well known for The Cluetrain
Manifesto (co-authored with Chris Locke, David Weinberger, and Rick
Levine) as well as for his work as Senior Editor of Linux Journal,
where he's been on the masthead since 1996.
Since 1996 Doc has run ProjectVRM at Harvard's Berkman Center for
Internet and Society, where he was also a Fellow from 2006-2010. In
that capacity he has fostered pioneering development of VRM (Vendor
Relationship Management) tools and services. Think of VRM as the
customer-side counterpart of CRM (Customer Relationship Management),
only broader than that. VRM provides individuals with both independence
and means of engagement. The economic thesis they seek to prove is
that free customers are more valuable than captive ones. Doc has high
faith that this will prove out in the same marketplace that will be
transformed by it.
His next planned book is titled the Giant Zero, and will explore the
Internet as infrastructure; work on that topic has been ongoing since
2006, under his fellowship at the Center for Information Technology and
Society at UC Santa Barbara.
Jon Lebkowsky is an author, activist, journalist, and blogger who
writes about the future of the Internet, digital culture, media, and
society. He's been associated with various projects and organizations,
including Fringeware, WholeEarth, WorldChanging, Mondo 2000, bOING
bOING, Factsheet Five, The WELL, the Austin Chronicle, EFF-Austin,
Society of Participatory Medicine, Extreme Democracy, Digital
Convergence Initiative, Plutopia Productions, Polycot Consulting,
Social Web Strategies, Solar Austin, Well Aware, Project VRM, and
currently Reality Augmented Blog. He is also a web strategist and
developer via Polycot Associates.

Thanks, Ted! And welcome, Doc!
You've said that the "intention economy" focuses on buyers, not
sellers. You've said "it leverages the simple fact that buyers are the
first source of money, and that they come ready-made. You don't need
advertising to make them." How do you make buyers? What's the future
you envision for the buyer/seller relationship?

Thanks! Great to be here.
The future I expect is one in which buyers have many more tools than
they have now, that the tools will be theirs, and that these will
enable buyers to work with many different sellers in the same way.
One primitive tool now coming together is "Do Not Track" (or DNT):
http://en.wikipedia.org/wiki/Do_Not_Track It's an HTTP header in a
user's browser that signals intention to a website. Browser add-ons or
extensions for blocking tracking, and blocking ads, are also tools, but
neither constitute a social protocol, because they are user-side only.
The website in most cases doesn't know ad or tracking blocking being
used, or why. On the other hand, DNT is a social gesture. It also isn't
hostile. It just expresses a reasonable intention (defaulted to "on"
in the physical world) not to be followed around.
But DNT opens the door to much more. Think of it as the opening to
dialog:
User: Don't track me.
Site: Okay, what would you like us to do?
User: Share the data I shed here back to me in a standard form,
specified here (names a source).
Site: Okay. Anything else?
User: Here are my other preferences and policies, and means for
matching them up with yours to see where we can agree.
Site: Good. Here are ours.
User: Good. Here is where they match up and we can move forward.
Site: Here are the interfaces to our CRM (Customer Relationship
Management) system, so your VRM (Vendor Relationship Management) system
can interact with it.
User: Good. From now on my browser will tell me we have a working
relationship when I'm at your site, and I can look at what's happening
on both sides of it.
None of this can be contemplated in relationships defined entirely by
the sellers, all of which are silo'd and different from each other,
which is what we've had on the commercial Web since 1995. But it can be
contemplated in the brick & mortar world, which we've had since Ur.
What we're proposing with VRM is nothing more than bringing
conversation-based relationships that are well understood in the
brick-and-mortar world into the commercial Web world, and weaving
better marketplaces in the process.
A bit more about how the above might work:
http://blogs.law.harvard.edu/vrm/2012/02/23/how-about-using-the-no-track-butto
n-we-already-have/
And a bit more about what's wrong with the commercial Web (so far, and
it's not hard to fix) here:
http://blogs.law.harvard.edu/vrm/2012/02/21/stop-making-cows-stop-being-calves
/

Back in 1991 I cofounded a company called FringeWare, Inc., which we
described as a "street market in cyberspace." FringeWare as many
things, but the original idea was to make it a community market. Our
insight was that the Internet could disintermediate the relationship
between seller and buyer, removing the distance the mass marketing
principles and operations had created. There was always a question of
how this could scale.
I think you're talking about is something similar - wondering what
your thoughts are about the issue of scaling the conversation in big
markets? Is VRM relevant to Coca Cola?

Given that we aren't the customers of sites like Facebook or Twitter
(paying corporate and governmental organisations are), how does the
idea of intention economy play out there? Are DNT-style dialogs a way
of changing our relationship with such sites?

Jon...
If VRM becomes relevant to Coca-Cola, it will be way downstream, and
probably to the company itself in developing new products, rather than
for selling old ones. Coke (the drink) is almost purely a brand
product, and mass-marketed. But the company is a big one that does many
other things. VRM can help there.
It's an old saw to say that listening to customers is a way to improve
and gain new market advantages. But the difference with VRM will be
adapting to standards and practices set on the customers' side -- ones
that work the same for all companies. There will be less and less
leverage in communicating only within a company's on communication
silo. IMHO, "social" services like Twitter and Facebook are not going
to provide those standard ways, because they too are privately owned
silos.
Scale will only happen when everybody uses the same stuff in the same
way. The Internet and its core protocols scaled because they were
essentially NEA: Nobody owned them, Everybody Used them and Anybody
could improve them. (Yes, some were owned in a legal sense, but in a
practical sense they were ownerless. This is why, for example, Ethernet
beat Token Ring. Intel, Xerox and Digital essentially released
Ethernet into the public domain while IBM wanted to keep Token Ring
fully private and charge or it. This bitter lesson had leverage later
when IBM embraced Linux.) Email as we know it won because it scaled in
exactly that way.
Rob...
You hit on an important distinction. Facebook, Twitter and Google
(with search and Gmail, for example) are like commercial broadcast in
the sense that their customers and consumers are different populations.
And that they sell the latter to the former. (Or at least data about
the latter.) Since consumers aren't customers, there is remarkably
little dialog and zero customer service. It will haunt them, just as it
has haunted commercial broadcasting.
I think DNT dialog can change our relationships with all sites willing
to engage users in users' own ways, and on users' own terms. The
problem we have at this early stage is that DNT is misunderstood all
over the place. It sounds too much like "Do Not Call," and users tend
to think it means the blocking of tracking. The ad business is freaking
out for obvious reasons. And retailers are dependent increasingly on
in-site tracking to customize "experiences" for users. Some of this
customization can be quite helpful, while some of it is unwelcome and
intrusive. In any case, the dialog can help.

DNT seems like a dumbed-down version of P3P
(http://www.w3.org/TR/P3P11/), which never seemed to go anywhere after
years of discussion and documentation. The idea was to have a protocol
for communication between websites re their privacy practices and users
(or user agents) re their privacy preferences. Similarly there've been
discussions about creating common standards for authentication and
identity that have been ongoing via the twice-yearly Internet Identify
Workshop, where you're one of the instigators, and those discussions
have seemed difficult - hard to get everybody on the same page. Right
now we have several popular authentication standards - Facebook
Connect, Twitter, OpenID - but no single coherent approach.
How does the difficulty in getting adoption of standards relate to
your statement above, that "scale will only happen when everybody uses
the same stuff in the same way"? Do you see convergence on a coherent
set of standards? Is that an opportunity-space for VRM?

DNT is different because it starts with the user, not the site. The
P3P1.1 spec is for sites: "The Platform for Privacy Preferences Project
(P3P) enables Web sites to express their privacy practices in a
standard format that can be retrieved automatically and interpreted
easily by user agents. P3P user agents will allow users to be informed
of site practices ..."
The W3C's DNT Tracking Preference Expression
<http://www.w3.org/2011/tracking-protection/drafts/tracking-dnt.html>
is about expression by the user. From the current draft abstract: "This
specification defines the technical mechanisms for expressing a
tracking preference via the DNT request header field in HTTP, via an
HTML DOM property readable by embedded scripts, and via properties
accessible to various user agent plug-in or extension APIs. It also
defines mechanisms for sites to signal whether and how they honor this
preference, both in the form of a machine-readable tracking status
resource at a well-known location and via a Tk response header field,
and a mechanism for allowing the user to approve site-specific
exceptions to DNT as desired."
What matters there (to me, at least) is that it starts with the user
and frames potential dialog between parties and processes.
Nearly all browsers already support it, or something like it, in some
way. And Microsoft, by turning it on by default, is driving adoption of
the standard in a proactive way. And, of course, adoption is
everything.
And yes, I do see coherence and convergence starting to happen here,
and I see it as a huge opportunity space for VRM. (I'd say more, but
have 5 and a 2 year old Grandkids crawling over me right now.)

An anonymous reader submitted this question via email:
Let's talk for a minute about the customer side.
When we're in a store, I mean when we walk in, we don't assume that
we'll be tracked in as much detail, or forced to sign abusive "Terms of
Entry and Service" at the door. I suspect that most people would be ok
with the many surveillance cameras all over IF we knew they were being
used ONLY in case a crime was committed and the need to identify the
perpetrator was relevant, instead of the the 10,000 Little Brothers
with their "improved face recognition and identity matching" patterns
and "data for sale" attitudes--essentially ganging up on us.
Would you help me understand what a reasonable online "customer"
person might look like? I'm guessing we'd have a virtual Contract of
our own, easily accessible to all others (like a personal RFID?). Do we
get to have a warning system when a store doesn't agree to our terms?
(I imagine a red blinking light in the corner of my glasses/screen as I
enter the door/site.)
More to the point, there's a world of conflicts that we need to
wrestle with, I think. For example:
- we may not have just one set of terms. We might need to represent
our different interests for family, self, work, etc.
- we need to know ourselves a lot better. There's what we want, what
we say, and what we really do.
- there are a lot more of us than there are of marketers, so we also
need group-forming functions to leverage our size and collective
interests, no? How's that work?
Thanks for your time and thoughts on this interesting topic.
one of many of me

> When we're in a store, I mean when we walk in, we don't assume that we'll
> be tracked in as much detail, or forced to sign abusive "Terms of Entry
> and Service" at the door.
Before Doc responds, please allow me to introduce a somewhat
contrarian point of view. I believe that most people -- Americans
at least -- have no such assumption. Obviously there is no explicit
consent to Terms of Entry or Service, but every large retailer *has*
such terms, and there is no opportunity to negotiate them, and
no one that I know of would have even the slightest expectation of
doing so. Everything in a bricks-and-mortar store is subject to the
retailer's policies on pricing, packaging, manner of purchase, methods
of payments, and return policy (if any). That is understood by part of
the socialization process starting when any child buys a candy bar at
a store, and on to adulthood.
When you walk into (say) a Walmart, you are being observed, both by video
and by humans. Some of this is for loss prevention; some of it is to
determine shopping patterns and in some cases to optimize store layout
and shelf displays. When you pay with a credit card, debit card, or
check, your purchases form a personal profile that is used for
marketing, supply chain prediction, and may be sold as an asset to
others for marketing purposes, and also become part of aggregate data.
If the retailer uses a loyalty card, that adds additional personal and
aggregate data.
I don't believe that more than a tiny, marginalized number of
people have any particular objection to, or even interest in, these
practices, and they are considered unremarkable.`My key question, then, is:
Why is there any reason to believe that it would,
or should, be different on the Internet?

Michael,
One of my first jobs out of college was running a department at
Bambergers, which has since been absorbed into Macy's. This was in
1969, but I doubt the protocols are much different today. At first I
was amazed to find how much shopper surveillance actually went on. Some
was through one-way mirrors or windows in the walls of the store, and
some was by security people acting as ordinary shoppers. But I was also
reassured quickly by the level of professionalism involved. The
various parts of the store, including those involved in surveillance,
were just trying to make the store function well as a store. There was
none of the intrusive tracking or coercive and one-sided "agreements"
of the sort that the anonymous contributor above talks about. Nobody
took liberties like we see happening on the Web today. Few of the
excesses the Wall Street Journal has been writing about for two years
at http://wsj.com/wtk can be excused by precedents in the offline
world. The manners of many (to be fair, far from all) online are simply
terrible. They only good excuse is that they can get away with it. The
"we're giving you a better experience" is 99% rationalization, because
it fails close to that percentage of the time.
But at the simplest level -- the beginning one -- it's okay, because
e-commerce is just seventeen years old. It was defaulted from the start
on a model called client-server, which some of us call calf-cow. Every
site is a cow, and all of us are calves. And every cow wants to run
the relationship with its calves in its own way. Thus there are as many
e-commerce silos as there are e-commerce companies. Who you are to
Amazon, and how you relate to it, are Amazon's business, not yours.
Your history, your preferences -- all data by and about you -- are
their's. Same goes for every site or service you encounter. True there
are some forms of "federation" between them; but much of that is what
we call "large companies having safe sex with customer data." And
superficially helpful services such as Facebook Connect (by which
Facebook's login button appears everywhere) carry huge exposure risks
about which users typically know little. (For more on that see
http://isharedwhat.com.)
The system we have is by now deeply normative, so we're inclined to
think it's at least sort-of okay. We are, to borrow another cliché,
boiled frogs.
Yet we won't stay boiled because we're dealing with a crappy system,
and that means there is much opportunity there. That's what VRM is
about, and it's why there are so many developers and developments
already at http://cyber.law.harvard.edu/projectvrm/VRM_Development_Work
.
We can't fix the system unless we approach the problem from the
customers' side rather than only from the seller's side -- which is
what we're in the habit of doing.
The Internet itself is an example of that approach. Its base design is
end-to-end and peer-to-peer. Each of us has the power to do data
processing and communications, world-wide, from our pockets. And to do
that using the same protocols, everywhere. Before the PC and the Net
came along, those powers were unthinkable. Now they are normative.
So that's what we're working toward: new and better norms.
Gotta stop and play with the grandkids again. More later. (And forgive
errors above. No time to proofread, and I want to get this up.)

> There was none of the intrusive tracking or coercive and one-sided
> "agreements" of the sort that the anonymous contributor above talks
> about. Nobody took liberties like we see happening on the Web today.
Really? Bamberger's customers in 1969 had some sort of control over
their interaction with the store? Hardly. Your only choice if you
objected to anything from the price of goods to the methods of
payment accepted to the presence of physical surveillance was
not to shop at the store. Period. That is about as one-sided a
customer relationship as I can imagine. And that same one-sided
relationship carries over to today if you walk into Macy's -
or Walmart.
If you want to use the boiled-frog cliche, I think you have to make
some sort of case that there's something terribly wrong with today's
normative system, which I think is far from proven. The problems I
have with the system are issues of user convenience, like having
multiple incompatible e-commerce and social media silos that each
require a learning curve, and different means of access. Facebook
Connect (and Google's single login) are steps *forward* from that.
Perhaps I was supposed to be impressed or horrified with the
results of http://isharedwhat.com. They seemed completely
unremarkable, and would undoutedly be seen as such by pretty much
anyone under 30. It strikes me that a lot of the current "privacy"
activism and its penumbra reflects Boomer values and expectations,
which in 2012 are as archaic as the traditional corporate-brand
values that the Cluetrain Manifesto railed against in 1999.

I'm not idealizing the power asymmetry between seller and buyer at
Macy's and Walmart. I'm saying that the problems we have online, such
as the one of user convenience you mention, can be addressed by
developing new and better tools on the customer side, rather than
constantly upgrading the seller side. And that the same tools can help
address the failings of brick-and-mortar retail as well.
FWIW, little of that work is being done by boomers. In fact, I
wouldn't be surprised if most of the work is being done by people under
30. But I'm also not much interested in checking. The work is what
matters. Not demographic characterizations of those doing it.

<mcb>'s posts point up an interesting question concerning the costs of
business and who bears them. Doc, could you talk about the costs of
data mining and the whole infrastructure of e-commerce to the sellers
and buyers?
How much of the costs and cost savings shifted to the consumers?

If you want to share this conversation, here's a short url:
http://bit.ly/docsearls
If you're not a member of the WELL, and you want to post a question or
comment, scroll to the bottom of the page. Click the link for
non-members that says "Submit a comment or question." When you post
there, your comment/question will be emailed to a moderator, and
(assuming relevance) will be posted in this discussion.

Thanks, David.
First, there are real costs to data mining and crunching, starting
with the $billions companies will spend to understand from data what
customers could tell them better with simple conversation. And that's
just for starters.
The best example I know for evidence of waste in marketing through
data mining is Trader Joe's. They have little marketing to speak of,
besides a Rose Bowl float and an opt-in flyer. They don't advertise.
They have no coupons, no loyalty program, no shelves sold to Pepsico or
other suppliers, no discounts, no buyback allowances, no contests, no
co-op, no dealer premiums, no display deals, slotting fees, push
money.... the list could go on, but why bother? These guys don't even
go to most retailer trade shows because too much of the agenda is about
manipulating customers. What Trader Joe's would rather do is talk to
customers. Personally. In the store. What they save through what they
learn is also passed on to customers. Who, for all the effort, love the
store. )For more about that, see Chapter 25 of The Intention Economy.)
Second, from the NYT piece (thanks for that), here are a pair of
telling paragraphs:
"These digital scores, known broadly as consumer valuation or
buying-power scores, measure our potential value as customers. Whats
your e-score? Youll probably never know. Thats because they are
largely invisible to the public. But they are highly valuable to
companies that want  or in some cases, dont want  to have you as
their customer.
"Online consumer scores are calculated by a handful of start-ups, as
well as a few financial services stalwarts, that specialize in the
flourishing field of predictive consumer analytics. It is a
Google-esque business, one fueled by almost unimaginable amounts of
data and powered by complex computer algorithms. The result is a
private, digital ranking of American society unlike anything that has
come before."
The problem here is the assumption that all knowledge of the buyer
should belong to the seller, and that "big data" can know the buyer
better than the buyer knows herself. This is psychotic, because it is
detached from the reality we call human nature, which is differentiated
on an individual basis.
The best guidance I know on this matter comes from Walt Whitman
<http://searls.com/whitman.html>:
I know that I have the best of time and space.
And that I was never measured, and never will be measured.
I know this orbit of mine cannot be swept
by a carpenter's compass.
I know that I am august.
I do not trouble my spirit to vindicate itself
or be understood.
I see that the elementary laws never apologize.
The spotted hawk swoops by and accuses me.
He complains of my gab and my loitering.
I too am not a bit tamed. I too am untranslatable.
I sound my barbaric yawp over the roofs of the world.
VRM development -- and the intention-based economy that results from
it -- is for the spotted hawks in all of us.

But is that really the assumption? (I.e. "that 'big data' can know the
buyer better than the buyer knows herself"?) That feels like an
overstatement. As a marketer measuring "potential value as customers,"
I wouldn't need to know everything about you. I'd have a very specific
target: those behaviors and predilections that predict that you'll buy
my widgets. I know one aspect of VRM thinking is about letting me
control the uses of my data, and I'm totally down with that. But I
think the argument for VRM vs the big data approach is that it's more
efficient to let your customers come to you, and tell you what they
want, than to do a lot of speculative tracking and data gathering to
second-guess the customer's intention. That gets back to your point
about Trader Joe's: they don't waste a lot of dollars trying to create
or attract new customers - they focus their efforts on direct
conversations with known customers, which, done right, is far more
efficient than traditional mass marketing, but also more efficient than
more contemporary data-driven target marketing.
Am I off base here?

Take a look at what IBM is pushing here:
<http://www.ibm.com/smarterplanet/us/en/smarter_marketing/overview/>
Look at the dollars involved. Look at the responsibility taken on the
corporate side for controlling the customer experience, and how little
direct input the customer actually has, despite verbiage suggesting
that the CMO (chief marketing officer) actually knows the customer "as
an individual." Check out the case studies
<http://www.ibm.com/smarterplanet/us/en/smarter_marketing/examples/>,
all of which are about improving old fashioned targeted marketing. Read
Jeff Jonas, of IBM, on "space time travel":
<http://jeffjonas.typepad.com/jeff_jonas/2009/08/your-movements-speak-for-thems
elves-spacetime-travel-data-is-analytic-superfood.html>
So maybe it's less about "knowing the buyer better than the buyer
knows herself" than about "knowing the buyer well enough not to bother
engaging the buyer as a human being." Hey, why bother to "connect
millions of data points for a more detailed customer portrait" and to
"understand customers as individual across millions of transactions,"
if not to paint a picture of an individual to a degree of detail that
even the individual might not acknowledge, much less actually see? And
that relieves you of the need to engage that individual directly?
(BTW, I don't want to tar IBM here. They're making hay while the Sun
shines, and Jeff himself is very big on privacy:
<http://bit.ly/NXx9nK>.)
The argument (or a main one) for VRM is the one you describe. Yet it's
not necessarily against "big data" itself. There is nothing wrong with
a company wanting to understand all it can about its markets, its
customers, and what's going on in the world. But there is opportunity
wasted by rationalizing away the need for customer contact, and for
customer independence and empowerment. That's not an intentional effect
of the argument for big data driven marketing, but it's still an
effect.

I definitely believe big data can "know a customer better than she
knows herself". Whenever this is studied, from political polls to
research on everything from sexual behaviour to shopping, there is a
big difference between what people say and what they do.
If a company wants to make the most rational choices about what
products to develop and how to price them and market them, they're
going to do better analyzing actual customer behaviour than relying on
customers' self-programmed VRM profiles.

It was pretty clear in the book that you weren't presenting an
either/or argument or claiming to have answers. In fact, you close with
a set of questions. The first of those is relevant to this discussion:
"Can advertising people ever finally cross the Chinese wall between
their work and who they are as real people and customers?" Have you
talked directly to advertisers about VRM thinking? How well do they get
it?
One other question is how well you can scale "engaging the customer"?
In advocating that engagement, are you advocating a scaling down of
marketing interactions? Do we get away from "mass marketing"?

> Why not both?
Because they are going to be in conflict. If a someone clicks a VRM
box that says, "I'm not interested in ads about hair products", but their
verifiable shopping behaviour is that they buy hair products, often in
response to clockthrough ads, which are you going to believe and act
accordingly on?

Michael,
First, VRM tools the customer's, not of the seller's. So the seller
wouldn't provide a "VRM box" to click on. (Unless, perhaps, if the
seller wants to know if the customer is using VRM tools or services.)
Second, if the customer doesn't want ads for hair products and says so
with a VRM tool, that's the customer's prerogative, and potentially
useful information to the seller as well, regardless of whether or not
the customer buys hair products or has clicked on an ad before.
Chapter 25 of The Intention Economy is titled "The Dance." At its
simplest, that's what VRM proposes: both sides engaging, each
sometimes taking the lead, each sometimes following, both moving
through steps that both come to understand, because those steps have
become become common ways of interacting in the open marketplace.

Jon,
The short answer to your first question is that most of the people
I've spoken to, at companies that advertise, get VRM to some degree. Or
are at least interested in it. But then, that's why I'm talking to
them. So I can't generalize from there. It's too early in any case.
Meanwhile, it helps to remember that no company defines itself only as
"an advertiser." They're a store or a manufacturer or a contractor, or
whatever. For companies, advertising is a line item. It's overhead.
The money spent on advertising can be spent many other ways as well, or
not at all (as in the case I cite of Trader Joe's).
It also helps to recognize that online advertising is less a breed of
old-school advertising (that ran in media other than the Net) than of
direct response marketing, which began with direct mail. It's more
about sales than about branding. The top advertisers overall -- car
makers, phone and cable companies, retailers, manufacturers, insurance
companies -- still spend most of their money on major media (TV, radio,
magazines, newspapers), and branding, rather than online looking for
direct responses. But some of them are big online as well. Here is a
picture of Google's 2011 revenue breakdown by advertiser:
http://www.techi.com/2012/03/a-breakdown-of-googles-top-advertisers/ .
Google is the biggest player in online advertising, but their total is
still a fraction of what's spent on advertising overall. (Which is
around half a trillion dollars per year.)
Note that most of Google's search-based advertising (AdWords) is
intention-based. That is, it appears in your browser in response to a
search, which is an intentional act. I think there is a good chance
that, as Google and Microsoft evolve toward embracing VRM, AdWords and
the Bing equivalent will morph toward the "Dance" I mentioned in the
response to Michael above. How, I don't know, but I expect that Google
and Microsoft will wish to stay in a mediating role between the
intentions of customers and companies in position to respond.
Most of the conversations I've had with companies since the book came
out has been around these larger systematic changes, and the upcoming
tools and services that will make the changes happen, rather than
around advertising itself. I think that's because the advertising game
right now is a very noisy one that is caught up in its own dramas.
Somewhat less noisy is the CRM business, which matches up more directly
with VRM development. CRM is separate from advertising, on the whole.
As for people in the advertising business itself, some of those had an
influence on the book while I was writing it, especially John Battelle
and Randall Rothenberg. Both had me speak at an IAB conference last
year (through a conversation with John on stage):
http://www.youtube.com/watch?v=X07JCMlASnE . Those are guys for whom
the "Chinese wall" doesn't exist: they can see, and operate, on both
sides. As for the rest of the business, I've not focused on it, because
I expect advertising will change as a second- or third-order effect of
VRM development and deployment in the marketplace.
In your second question... "How well you can scale 'engaging the
customer'? ... the "you" is the company. The scale we want with VRM is
to be able to relate to many different companies in common and
well-understood ways, rather than in as many ways as there are
companies.
For example, loyalty cards don't scale for customers. Having lots of
them is mostly a pain in the ass. There are approaches, of course. I
have a friend who scales his loyalty cards by punching a hole in the
corner of each (careful not to hurt the barcode or the mag-stripe) and
putting them on a janitor's key ring. He organizes them alphabetically
and keeps the whole thing in his car. At the drug or grocery store he
whips out this big round messy thing and presents it to the
self-check-out machine or the baffled person behind the counter. I know
a woman who has a fat wallet in her purse devoted to all the loyalty
cards she carries. Real scale for both of these people would be
eliminating the whole separate-card system (in which each loyalty
program is a separate silo) and replacing it with one way of defining a
genuine relationship with each company. That way, for example,
companies with genuine relationship would get favored treatment when
the customer signals an intention to buy. Also, the customer should be
able to change their contact information for every company in one move,
rather than dozen, fifty or a hundred different moves, each on a
separate website.
I don't see this as a scaling down of marketing interactions, but
rather of eliminating waste, increasing efficiency and increasing
genuine loyalty, by removing gimmickry and costly self-delusional
bullshit.
Last year I noticed that Panera Bread, one of the few chains where I
like to shop, started pushing loyalty cards. It pissed me off, because
I was already loyal and didn't want this fashionable friction inserted
into an otherwise functional relationship. When I said so to the woman
behind the counter, she said, "I know, I know. We hate them too." Later
they stopped putting a stack of cards for customers to take on the
counter, and stopped asking if customers carried cards. So I just
looked up Panera and loyalty cards in a search, and found this article
by Dale Furtwengler:
http://www.retailcustomerexperience.com/blog/6219/When-is-a-reward-NOT-a-rewar
d-A-lesson-from-Panera-Bread
. Read the post and the comments. It's a different angle on the same
issue for a retailer like Panera. What is says is that this loyalty
program has failed to scale for both Panera and its customers. For
customers like me, who don't carry a Panera card, business is the same,
and the company knows whatever it knows already by less gimmicky
means. Customers who like and carry loyalty cards are now buying for
the gimmicky reasons (e.g. discounts, points and the rest) rather than
just because they like the store and the products sold there. Panera
itself gets a skewed view of their customers, bassed on what they learn
only from the subset using loyalty cards. The whole mess makes Trader
Joe's approach -- to avoid the whole mess and make the shopping
experience as simple, pleasant, inexpensive and good as the products
sold there -- look a lot more appealing.
So, to your third question, "In advocating that engagement, are you
advocating a scaling down of marketing interactions? Do we get away
from 'mass marketing'?" the answers are yes. But mass marketing won't
go away. As I say in the book about advertising, it will do what only
it can do. Coca-Cola will always need mass marketing. But the rest of
the business world won't need to be just like Coca-Cola.